Mario Draghi, President of the European Central Bank (ECB), said the launch of bitcoin futures “could lead European banks too to hold positions in Bitcoin.”
During a European Parliament plenary debate on the ECB Annual Report, Draghi said in a statement this Monday:
“We are not observing a systemically relevant holding of digital currencies by supervised institutions – by banks, in other words.
Actually, the credit institutions established in the European Union are showing a limited appetite for digital currencies like Bitcoin, notwithstanding the high level of public interest.
However, recent developments, such as the listing of Bitcoin futures contracts by US exchanges, could lead European banks too to hold positions in Bitcoin, and therefore we will certainly look at that.”
Due to the high volatility of digital currencies, Draghi warned they are very risky assets. However, in preparation for banks potentially hedging with cryptos, Draghi said:
“Work is under way in the Single Supervisory Mechanism to identify potential prudential risks that these digital assets could pose to supervised institutions.”
Draghi further admitted that the quantitative easing money printing of some 60 billion Euros a month might be fueling bubbles.
“It is quite clear that QE raises asset prices,” he said. “The holders of assets are generally wealthy institutions or wealthy people, so in the short run you have a worsening of distribution.”
But he insisted that due to increasing employment inequality decreases, arguing money printing “is by far the most powerful measure for decreasing inequality in any economic system.”
Central banks are however beginning to tighten monetary policy, with the FED and the Bank of England ending money printing some time ago and now potentially eyeing an increase in the record low interest rates.
But this is the first time a central bank official has suggested banks could start taking positions in digital currencies and tokens, so seemingly implicitly giving the green light.